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The Dynamic Effects of Information on Political Corruption: Theory and Evidence from Puerto Rico

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  • Bobonis Gustavo J.
  • Cámara Fuertes Luis R.
  • Schwabe Rainer

Abstract

Does the disclosure of information about corrupt activities induce a sustained reduction in corruption? We use longitudinal data on audits of municipal governments in Puerto Rico to answer this question. We find that corruption is lower in municipalities audited before an election. However, these municipalities do not exhibit decreased levels of corruption in subsequent audits. Mayors in municipalities audited preceding the previous election have higher re-election rates, suggesting that audits enable voters to select more competent politicians. We present a political agency model that rationalizes the observed short-term and dynamic effects of information on corruption and re-election rates. We conclude that audit programs must be timely, sustained, and long-term commitments in order to be effective.

Suggested Citation

  • Bobonis Gustavo J. & Cámara Fuertes Luis R. & Schwabe Rainer, 2012. "The Dynamic Effects of Information on Political Corruption: Theory and Evidence from Puerto Rico," Working Papers 2012-14, Banco de México.
    • Handle: RePEc:bdm:wpaper:2012-14
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    1. Audits of municipal governments and corruption (Puerto Rico)
      by UDADISI in UDADISI on 2013-01-23 16:49:00

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    Cited by:

    1. Ramos, M., 2018. "Estimating the nature of political corruption: evidence from a policy experiment in Brazil," Research Department working papers 1391, CAF Development Bank Of Latinamerica.
    2. De La O, Ana L. & González, Lucas I. & Weitz-Shapiro, Rebecca, 2023. "Voluntary audits: Experimental evidence on a new approach to monitoring front-line bureaucrats," World Development, Elsevier, vol. 162(C).

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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